Risk or Reward: Should Companies Take Social Stands?

As questions of trust continue to rise within global institutions and populations, the question for many companies has become: Should we take social stands?

Some context around the challenge — and insight into possible actions — comes from the recently-released 2019 Edelman Trust Barometer.

Social Issues: Changes in Trust

Among the report’s highlights:

Trust Erosion: “The past two decades have seen a progressive destruction of trust in societal institutions, a consequence of the Great Recession, fears about immigration and economic dislocation caused by globalization and automation. Traditional power elite figures, such as CEOs and heads of state, have been discredited. The growth of social media platforms fully shifted people’s trust from a top-down orientation to a horizontal one in favor of peers or experts.”

Employees Trust Employers: “People have low confidence that societal institutions will help them navigate a turbulent world, so they are turning to a critical relationship: their employer. Seventy- ve percent of respondents trust “My Employer”—19 points more than business in general and 27 points more than government.”

Lead Change: “Establish an audacious goal that attracts socially-minded employees and make it a core business objective (for example, the Unilever Sustainable Living Plan to double revenue without increasing the company’s use of natural resources). To realize this full-scale commitment to societal change, companies must first address employees’ very real fears about the threat of automation to their livelihoods and provide them with retraining.”

Within this context, businesses have increasingly been using topical social and environmental issues to build trust and authenticity with consumers and increase sales.

Examples: Companies & Social Issues

While the following examples are all controversial and have received extensive media coverage, some have been more successful than others.

With nearly 28 million YouTube views, this campaign was viewed as extremely controversial but ultimately successful as its calls to end racial bias and abuse appealed to its target younger demographic.

With more than 27 million YouTube views, this campaign received mixed sentiment. Some praised the brand for tackling an important issue, others criticized it for its approach and questioned why the razor brand is inserting itself into the debate. (Financial Times,The Guardian, Forbes)

But if the ultimate judgment comes in the marketplace, YouGov offers a strong endorsement: Since the advert aired, a third (33%) of those who would consider buying Gillette selected the brand as their first choice, 13% points more than in December.

Iceland, the UK based grocery retailer, was criticised for exploiting Greenpeace’s video on palm oil, with many viewing it as inauthentic because it has not been able to live up to its targets on removing palm oil use. Green campaigners also criticised the campaign for being too ‘short-sighted’ as boycotting palm oil entirely can have worse consequences (The Telegraph, Wired).

Some of the critique highlights how much authenticity and accuracy matter. The Telegraph reports: “The company promised: ‘The Iceland no palm oil pledge is that by the end of 2018, 100 per cent of the supermarket’s own label food lines will contain no palm oil, reducing demand for palm oil by more than 500 tonnes per year.’ However, an investigation by the BBC found that the store still sells 28 own-brand products with palm oil or fat, as well as more than 600 from other brands.”

Consumers Speak: ‘Urgent Desire for Change’

While significant trust gaps continue, Edelman notes an important evolution: “Despite the divergence in trust between the informed public and mass population, the world is united on one front—all share an urgent desire for change.” And yet, “only one in five feels that the system is working for them, with nearly half of the mass population believing that the system is failing them.”

Still, for companies considering the risks and rewards of taking stands on social issues, the YouGov research found that “the data shows that GB and US consumers are broadly similar when it comes to the bigger picture”:

“The majority of US (78%) and UK (80%) consumers believe to some extent that it is important for brands to have a clear point of view on the wider issues in society”

“69% of GB and 71% of US consumers believe that brands should be honest”

“More than half of people (52%) of people in Britain think that brands should be able to express how they feel on a certain topic, compared with 61% of those from the US.”

“Just under half (48%) of Americans say they like brands that are willing to get involved in social issues and 42% of Brits say the same.”

“Almost six in ten (59%) people in both countries don’t think brands should express views on social or political issues, but…this depends on the industry and the issue. This indicates that it’s up to the brand themselves to weigh up the risk versus the reward and understand what causes will resonate with their own audience and what will put them off.”